With a legislative guillotine hanging over its head, the city of Pittsburgh's pension board met today to map out a response to fast-moving state legislation that would strip it of control of some $265 million in investments and saddle the city with a big bill to bridge a $634 million funding gap.

As of July 31, the city's pension fund held $265 million, up $13.5 million from May's report. That reflects just 29 percent of the $899 million the fund should contain to cover obligations to retirees and current employers.

Yesterday's state Senate approval of a bill that would assert state control over the long-struggling city pension fund added urgency to the board's quarterly meeting, which normally focuses on the pension fund's shaky balance. City officials have tried, but failed, to slow the legislation, which also allows Philadelphia to boost its sales tax by 1 percentage point.

"It was made very clear, to us that this is very important to Philadelphia, and this is going to get done for Philadelphia," said Mayor Luke Ravenstahl. He said the legislation would stick the city -- either now or after an eight-year phase-in -- with annual bills that would force tax hikes or service cuts.

"The deal's already been done, guys," said board member Joe King, president of the firefighters union, noting that Philadelphia gets new taxes and smaller towns get some pension payment relief. "That's how our politics work in Pennsylvania."

The seizure of Pittsburgh's fund appears to reflect Harrisburg's frustration with the city's decades-long failure to shore up its pension pot, said Controller Michael Lamb, basing that on his calls to several Senate and House offices.

Harrisburg's perspective, according to Mr. Lamb: "The city's problem has gone on so long -- no reflection on this administration -- and the only way to do something about it, and make sure that it's done, is to have the state do it."

Mr. Ravenstahl wants to lease out the city's public parking garages, hoping that will raise at least $200 million. That windfall, plus increased annual contributions to the fund, could give it a healthy balance within 20 years, he said.

"How about a revenue stream?" Mr. Ravenstahl asked, rhetorically, as if addressing legislators. He has asked the legislature for approval to hike the $52-a-year tax on people who work in the city in order to bolster the pension fund. He will continue the discussion at a public meeting in Council Chamber at 6 p.m. tonight.

The legislation is now before the House Rules Committee, according to city Finance Director Scott Kunka.

Control of the city's pension fund could end up in court.

Pension fund solicitor Fred Frank would not discuss conflicts between the state legislation and the city's home rule powers in the open meeting, saying that should be reserved for a closed executive session, which is usually the forum for talk of potential litigation. The board later entered into executive session.